Earnings

The cost of sales increased by 4.5 per cent to €860.2 million (Q1 2015: €823.5 million), slightly below the rate of growth in revenue. Gross profit improved to €360.4 million (Q1 2015: €341.3 million) while the gross margin advanced from 29.3 per cent to 29.5 per cent.

Selling expenses grew by 5.9 per cent to €157.3 million (Q1 2015: €148.5 million) as a result of the stepping up of sales activities. Development costs totalled €37.0 million (Q1 2015: €34.0 million). Administrative expenses came to €86.0 million in the quarter under review, compared with €84.3 million in the prior-year period. The ‘other’ item of €8.8 million was up by €1.2 million on the prior-year figure (Q1 2015: €7.7 million). This included the share of profit (loss) of equity-accounted investments, which amounted to a profit of €0.2 million; the prior-year figure had been a loss of €1.6 million as it was still affected by the loss contributed by Linde Hydraulics. > TABLE 07

There was a significant decline in the balance of financial income and financial expenses, leading to net financial expenses of €40.4 million (Q1 2015: net financial expenses of €20.6 million). This was mainly attributable to the renewing of the Group’s funding in February 2016. As part of this, early repayment charges of €15.2 million were paid due to the repayment ahead of schedule of the corporate bond. Net financial income and expenses were also adversely affected by an amount of €10.5 million representing a reversal of the deferred borrowing costs for the corporate bond and the previous syndicated loan. This amount did not have an impact on cash flow. The renewing of the funding resulted in total non-recurring financial expenses of €25.7 million in the quarter under review.

Income tax expenses amounted to €15.5 million (Q1 2015: €19.6 million). Current income taxes came to €15.3 million (Q1 2015: €22.6 million). The tax rate was unchanged year on year at 31.9 per cent.

The KION Group’s net income after taxes was €33.0 million (Q1 2015: €41.9 million). Diluted and basic earnings per share for the reporting period came to €0.33 (Q1 2015: €0.41).